Peruvian economy will be gradually dynamized in the second half of the current year and lead towards a stronger recovery, since domestic and seasonal shocks affecting primary sectors are “abating,” Moody’s Sovereign Group affirmed today.
“Domestic and seasonal shocks that had negatively affected the primary sectors seem to be abating and we continue to expect a stronger recovery in the second half of the year,” the Vice President of Moody’s Sovereign Group Jaime Reusche affirmed.
Therefore, “we expect that economic activity will gradually accelerate in the second quarter.”
He went on to add the acceleration will partly reflect a low base of comparison, given that the slowdown began in April 2014, and partly a rebound of public investment at the local and regional government level.
“Output growth is likely to strengthen in the second half of the year because of increased mining production and a more benign external demand environment,” The Vice President stated.
“Economic recovery will depend on investment and private sector confidence,” he suggested.
2015 so far
Reusche mentioned Peru’s Statistical Institute (INEI) reported the economy grew by almost 2.7% (2.68% to be more concrete) year over year in March, above the median market forecast of 2.3%.
Despite the upside surprise for March, first-quarter economic performance overall was weaker than the agency had anticipated.
Moody’s estimated the Peruvian economy expanded 1.7% in the first quarter over the corresponding period of last year, a slower rate than they had anticipated due to a weak external demand. Nonetheless, the downside and upside risks to Moody’s “growth forecasts for 2015-16 are balanced.”
2015 & 2016 Estimates
According to the analyst, firmer private investment in 2016 is likely to increase economic dynamism in that year, following two years of “lackluster performance.”
In this sense, the analyst projected the Peruvian economy is to expand by 3.6%, in 2015, and 4.5% in 2016."
“Firmer private investment in 2016 is likely to increase economic dynamism in 2016, following two years of lackluster performance, leading to our forecast of 4.5% growth for the year. The downside and upside risks to our growth forecasts for 2015-16 are balanced,” it stated.
(END) JJN/JJN/MVB
Published: 5/21/2015